Matter of Goldberg

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

IN THE MATTER OF ARTHUR ABBA GOLDBERG, An Attorney at Law (D-146)

Argued June 20, 1995 -- Decided November 9, 1995

PER CURIAM

This matter arises from a motion filed by the Office of Attorney Ethics for final discipline. On August 4, 1989, following certain criminal convictions, Arthur Abba Goldberg was temporarily suspended from the practice of law in New Jersey.

Goldberg pleaded guilty in the U.S. District Court for the Central District of California to three counts of mail fraud. At that time, he was executive vice president and a major stockholder of Matthews & Wright, Inc., a New York underwriting firm. Goldberg directed Matthews & Wright's municipal underwriting activity. Matthews & Wright contracted with the Guam Economic Development Authority (GEDA) to underwrite $300 million worth of bonds. According to the United States Attorney, Goldberg and others at Matthews & Wright engaged in a fraudulent scheme by participating in bribery and deception to procure the issuance of the bonds in order to finance single-family housing in Guam. As a result of this scheme, the GEDA's plan to finance the housing collapsed.

In exchange for underwriting the bonds, Goldberg and Matthews & Wright received a fee of $10.5 million. Matthews & Wright deposited $4.5 million on a trust fund known as the Program Development Fund (PDF) for the development of multi-family housing in Guam. Two checks drawn on the PDF account formed the basis of Goldberg's convictions. One of those checks was drawn in the amount of $30,000 and was issued to Management and Development, the consulting company of Municipal Resources. The check was purportedly issued to Municipal Resources for reviewing an FHA credit-enhancement study that was to assist Guam developers. Goldberg knew that Municipal Resources had not reviewed that study because it did not exist. Nonetheless, Goldberg approved the bogus bill sent by Municipal Resources. This money was allegedly used to bribe the Governor of Guam in exchange for supporting the bond issue. In his Rule 11(c) statement, in compliance with the Federal Rules of Criminal Procedure, Goldberg stated the factual basis for his plea. He admitted that: the $30,000 disbursement was improper and was not for an appropriate purpose; and he knowingly caused the money to be delivered by U.S. mail.

The second PDF check was in the amount of $27,500 and was payable to Alpha Communications, Ltd., a non-existent consulting company that Goldberg had an employee create. Goldberg approved the issuance of the check to Alpha for services that it never performed and $15,000 of those funds were used by Goldberg, personally. In his Rule 11(c) statement, Goldberg admitted that: he caused the improper disbursement of $27,500 to Alpha Communications; the disbursement was improper and was not for an appropriate purpose; and he knowingly caused the money to be delivered by U.S. mail.

The third count of mail fraud against Goldberg charged that in furtherance of the PDF mail fraud, he caused a letter to be mailed to the GEDA on October 26, 1986 that deprived Guam of $57,500 deposited in the PDF.

Goldberg pleaded guilty to all three counts of mail fraud and admitted that he acted with reckless indifference in the authorization of improper disbursements from the PDF, in the truth or falsity of the representations in the mailings, and in Guam's legal and financial interests. Goldberg was sentenced Goldberg to a term of eighteen-months imprisonment and was fined and ordered to pay partial restitution to the Territory of Guam.

Goldberg also pleaded guilty in the U.S. District Court for the Southern District of Illinois to one count of conspiracy to defraud the United States. In that matter, Matthews & Wright agreed to underwrite the issuance of over $223 million in escrow bonds for the development of a riverfront housing project in East St. Louis, Illinois. The indictment alleged that Goldberg participated in a conspiracy to ensure that the bonds were deemed issued on December 31, 1985 even though they were not validly issued until 1986. This enabled Goldberg to take advantage of a favorable tax law relating to arbitrage transactions. Goldberg was sentenced to eighteen months imprisonment, to be served concurrently with the California term.

The Disciplinary Review Board (DRB) unanimously recommended disbarment. Goldberg contended that the Court could not disbar him for intentional misconduct because he had pled guilty only to reckless authorization of improper disbursements and to use of the mail in connection with those disbursements. After oral argument, the Court remanded the matter to the DRB for "findings setting forth those facts conclusively presumed to exist because of the conviction itself . . ."

On remand, the DRB again unanimously recommended disbarment. The DRB concluded that Goldberg's criminal convictions clearly and convincingly demonstrated his participation in activities that reflected adversely on his honesty, trustworthiness, and fitness as a lawyer.

HELD: Because his criminal convictions clearly and convincingly demonstrate his participation in activities that reflect adversely on his honesty, trustworthiness and fitness as a lawyer, Arthur Abba Goldberg is DISBARRED from the practice of law in New Jersey.

1. A criminal conviction is conclusive evidence of guilt in disciplinary proceedings; therefore, the only issue to be determined is the quantum discipline to be imposed. In making that determination, the Court looks at: the nature and severity of the crimes; whether the crime was related to the practice of law; and any mitigating factors, such as evidence of the attorney's good reputation and character. The facts underlying a motion for final discipline based on a criminal conviction also may be relevant to the nature of the discipline imposed. (pp. 10-11)

2. The pre-sentence reports and the sentencing hearing shed light on the totality of the circumstances surrounding Goldberg's guilty pleas. In the California action, Goldberg admitted to reckless indifference in the authorization of improper disbursements from the PDF; in the truth or falsity of the representations in the mailings; and in Guam's legal and financial interest in the PDF. The presentence report indicates that Goldberg's conduct, in addition to being reckless, was knowingly and willfully dishonest. Furthermore, in the Illinois action, Goldberg's Rule 11(c) statement provides clear and convincing evidence of his dishonest and fraudulent conduct. He admittedly stated that he knowingly and willfully conspired to interfere with the IRS. (pp. 11-13)

4. Goldberg was actively involved in community service and in efforts to resettle immigrants from the former Soviet Union and Eastern Europe. Nonetheless, his conscious participation in the illegal activities leading to his criminal convictions outweighs these mitigating factors. Although Goldberg's conduct and criminal convictions do not relate directly to the practice of law, he was obligated to adhere to the high standards of conduct required of a member of the bar even though his activities did not involve the practice of law. (p. 15)

Pursuant to Rule 1:20-6(c) (2) (i), the Office of Attorney Ethics (OAE) filed a motion for final discipline of respondent, Arthur Abba Goldberg. The motion was based on two separate criminal convictions. In the United States District Court for the Central District of California, respondent pled guilty to three counts of mail fraud, in violation of 18 U.S.C.A. §§ 1341, 1343. In the United States District Court for the Southern District of Illinois, ...

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